Wild Oil Price Forecasts: Some Predict $350 if Strait of Hormuz Is Blocked
- Chances of traffic chaos in the strait through which 21% of daily global petroleum consumption passes are low.
- In the event of a supply disruption, the EIA estimates that around 3.5 million bpd of effective unused capacity from these pipelines could be available to bypass the Strait of Hormuz.
- Some analysts think that oil prices could reach more than $300 per barrel in the case of a full blockade of the Gulf of Hormuz.
Talk of a possible disruption to traffic in the world's most vital oil cargo lane, the Strait of Hormuz, resurfaced as markets and traders are awaiting the next move in the Israel-Iran standoff.
An Iranian blockade, or an attempt at such, of the narrow strait between Oman and Iran connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea could easily send oil prices soaring above $100 per barrel and reaching all-time highs, analysts say.
However, these same analysts see a Strait of Hormuz disruption as a low-probability event—for now.
Chances of traffic chaos in the strait through which 21% of daily global petroleum consumption passes are low, but if the worst comes to the worst, the impact will be high—not only on oil prices, but on natural gas markets, too, because Qatar's LNG is passing through the lane.